The video game grey market is the trade of systems or video games through unofficial or unintended methods, such as selling on online auction sites. This is typically done when there is a short supply of the product.
The most recent grey market incident was the launch of the Playstation 3 and Wii systems in November 2006. During this time, both systems were severely understocked and many buyers who purchased a system looked to gain a profit by selling the system on Ebay for a higher price. PS3 prices reached an average high of $2,367, a retail mark-up of nearly $1,800.
The grey market can be used to gauge supply issues. For certain cases, there is a strong correlation in monthly unit sales and grey market prices from auction sites like EBay. For example, the Wii suffered from shortages in January 2008 and this resulted in a lower monthly unit sales and mark-up prices of 40%. When supply increased in April 2008, monthly unit sales also increased and correspondingly the mark-up price went down to only 10%.
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- Feature: The Decline of the PS3 Grey Market
- Terepeak Ebay analysis for Wii grey market
- Electronic Entertainment Design and Research - NPD analysis
- Video game price charts